The Central Board of Direct Taxes (CBDT) has recently launched the second phase of its NUDGE initiative to improve voluntary compliance relating to foreign assets. Based on the latest Automatic Exchange of Information (AEOI) data for FY 2024–25, the department has identified high-risk cases where foreign assets may exist but were not reported in Income Tax Returns for AY 2025–26. From 28 November 2025, CBDT will issue SMS and email advisories to these taxpayers, urging them to review and revise their returns by 31 December 2025 to avoid penal consequences.

The initiative aims to ensure accurate reporting in Schedule Foreign Assets (FA) and Schedule Foreign Source Income (FSI), in line with statutory obligations under the Income-tax Act, 1961, and the Black Money Act, 2015. Using its PRUDENT approach, CBDT continues to leverage data analytics to simplify compliance, reduce information gaps and strengthen a transparent, trust-based interface with taxpayers. This second NUDGE campaign builds on the success of the first drive, launched in November 2024, which prompted over 24,000 taxpayers to disclose foreign assets worth Rs 292.1 billion and foreign income of Rs 10.4 billion.

CBDT receives foreign asset information through CRS and FATCA frameworks, enabling it to identify discrepancies and guide taxpayers towards timely and complete compliance.